Stewart Wallach, Capstone's CEO, commented, "We are realizing record-breaking results as our strategy to continually develop new products and broaden our distribution channels has established traction. Major retailers promoting our products tell us that Capstone's safety lighting innovations have been well received by their customers. We have gained more direct import sales opportunities as a result."

Record Third Quarter Results Driven by Strong Revenue

Revenue was $5.7 million, up 21% compared with the prior-year period. The year-round shelf presence of Capstone's safety lighting solutions, facilitated by the domestic distribution strategy that was put into place in 2012, has improved placement for the Company's products during the 2013 holiday shopping season as well.

Gross profit for the quarter was up over 50% to $1.6 million. Gross margin was 27.4%, up from 22.1% during the prior-year period. Higher revenue levels, productivity improvements and a more favorable product mix drove the margin improvement.

Total operating expenses were $0.5 million down $0.1 million due to cost containment initiatives. Operating income of $1.0 million more than doubled from prior-year levels. Operating leverage on the higher revenue and slightly lower strategic investments drove increased operating margin of 18.4% during the third quarter, doubling the prior year's third quarter.

Net income nearly tripled to $0.9 million from net income of $0.3 million in the prior-year period.

Year-to-Date Results

Revenue for the nine month period ended September 30, 2013 was $7.3 million, an increase of 26% from $5.9 million in the prior-year period. Increased presence at large retailers, the continued progression of the domestic strategy and the resumption of seasonal direct imports drove the revenue improvement.

Gross profit for the first nine months of 2013 of $1.9 million was up 46% over the same period in 2012. As a percent of sales, gross margin was 26.5%, a 380 basis point improvement year-over-year.

Operating income was $0.3 million in the first nine months of 2013 compared with an operating loss of $0.2 million in the prior-year period. Net income improved measurably to just above breakeven compared with a net loss of $0.4 million in the first nine months of 2012.

Well Positioned for Record Fourth Quarter Revenue

Record net order backlog as of September 30, 2013 was $7.8 million. Of that, backlog expected to convert to revenue during the remainder of 2013 is approximately $6.0 million to $6.5 million, driving expectations for record-breaking revenue in the fourth quarter. Direct import revenue related to the holiday shopping season is expected to account for 80% of fourth quarter revenue. Solid re-order activity was driven by strong results from the Company's domestic distribution strategy. Heavy demand from end users throughout the year drove more frequent holiday season promotions at our major retailer customers. It should be noted that certain factors beyond the control of Capstone, including shipping container availability and weather-related factors, can cause changes in the actual timing of shipments. As a result, such variations can impact the timing of backlog conversion to revenue.

Confirming our expectations, revenue for the month of October 2013 was $3.6 million. This was a dramatic improvement over the prior year, as revenue for the entire fourth quarter of 2012 was $2.5 million. Accordingly, revenue in this year's fourth quarter is expected to be at a record level, resulting in full year 2013 revenue between $13.5 million and $14.5 million.

Mr. Wallach noted, "This is an exciting time for Capstone. The Company is more nimble than ever before, able to make smart decisions more efficiently and quickly. Product innovation, strategic distribution channel rationalization, and end user responsiveness are changing the financial profile of our Company into a long-term profitable growth story. Additionally, our product diversification strategy is progressing and we are beginning to see the early stages of the FIFA watch program develop. We eagerly anticipate orders related to that program in the near future."

He added, "Our Capstone International team in China continues to expand manufacturing capabilities and explore product diversification opportunities by capitalizing on our strong reputation for safe and efficient manufacturing practices. The FIFA program is only the first of what we expect to be many successful milestones, and we are very confident with Larry Sloven, our President of Capstone International, leading and maximizing the growth potential of that part of our business."

About Capstone Companies, Inc.

Capstone Companies, Inc. is a public holding company that engages, through its wholly-owned subsidiaries, Capstone Industries, Inc. and Capstone International HK, Ltd., in the development, manufacturing, logistics, and distribution of consumer and institutional products to accounts throughout North America and in international markets. See www.capstonecompaniesinc.com for more information about the Company and www.capstoneindustries.com for information on the Company's current product offerings.

FORWARD-LOOKING STATEMENTS:

This news release contains "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995, as amended. Such statements consist of words like "anticipate," "expect," "project," "continue" and similar words. These statements are based on the Company's and its subsidiaries' current expectations and involve risks and uncertainties, which may cause results to differ materially from those set forth in the forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements, include consumer acceptance of the Company's products, its ability to deliver new products, the success of its strategy to broaden market channels and the relationships it has with retailers and distributors. Prior success in operations does not necessarily mean success in future operations. The ability of the Company to adequately and affordably fund operations and any growth will be critical to achieving and sustaining any expansion of markets and revenue. The introduction of new products or the expanded availability of products does not mean that the Company will enjoy better financial or business performance. The risks associated with any investment in Capstone Companies, Inc., which is a small business concern and a "penny-stock Company" and, as such, a highly risky investment suitable for only those who can afford to lose such investment, should be evaluated together with the risks and uncertainties more fully described in the Company's Annual and Quarterly Reports filed with the Securities and Exchange Commission. Capstone Companies, Inc. undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. Contents of referenced URL's are not incorporated into this press release.

FINANCIAL TABLES FOLLOW. THE FOLLOWING SUMMARY FINANCIAL STATEMENT SHOULD BE READ ALONG WITH THE FORM 10-Q FINANCIAL STATEMENT FILED BY THE COMPANY WITH THE SECURITIES AND EXCHANGE COMMISSION.